Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. GEOGLOBAL RESOURCES INC. (896726) 10-Q published on Nov 16, 2012 at 4:17 pm
Reporting Period: Sep 29, 2012
To meet its obligations, the Company will be required to divest certain oil and gas interests, subsidiaries or other available assets, including by entering into other financing arrangements typical in the industry such as farming out interests in oil and natural gas properties. The Company will also continue to seek to raise capital through equity and debt markets.
The Company’s cash as at September 30, 2012, available for general operations of $0.1 million is not sufficient to meet its ongoing operational requirements. Subsequent to September 30, 2012, the Company has curtailed staffing at its Canadian and Indian offices and rationalized other expenditures to minimize the ongoing operational requirements pending the outcome of uncommitted financing activities described above. If these activities are unsuccessful, the Company will be forced to substantially curtail or cease exploration, appraisal and development expenditures and other operating activities.
For the three months ended September 30, 2012, we incurred a net loss of $12.9 million compared with a net loss of $1.3 million for the three months ended September 30, 2011. This increased loss is mostly attributable to a $9.6 million and $2.7 million impairment of oil and gas properties and loss on and impairment of available for sale investment, respectively, recorded in the three months ended September 30, 2012 as compared to a nil impairment of oil and gas properties and loss on and impairment of available for sale investment in the same quarter in 2011. The total impairment charged consists of $5.1million relating to the exploration licenses held in Israel and the balance of $4.5 million to the exploration blocks held in India.
For the three and nine months ended September 30, 2012, we recorded $2.7 million loss on and impairment of available for sale investment. This loss on and impairment of available for sale investment can be split into two components. During the year, we received 28.4 million common shares of ILDE as an available for sale investment, in exchange for the issuance of certain securities in our Company. ILDE’s common stock is listed and traded on the Tel Aviv Stock Exchange.
Our existing cash balance available for general purposes of $0.1 million at September 30, 2012 and our anticipated cash flow from operating activities are not sufficient to satisfy our current obligations and meet our exploration commitments of $15.1 million and $27.9 million over the twelve months ending September 30, 2013 and the twenty-seven months ending December 30, 2014, respectively. To meet these obligations, we will be required to divest certain oil and gas interests, subsidiaries or other available assets, including by entering into other financial arrangements typical in the industry, such as farming out interests in our oil and natural gas properties. We will also continue to seek to raise capital through equity and debt markets. Subsequent to September 30, 2012, we have curtailed staffing at our Canadian and Indian offices and rationalized other expenditures to minimize the ongoing operational requirements pending the outcome of uncommitted financing activities described above. If these activities are unsuccessful, we will be forced to substantially curtail or cease exploration, appraisal and development expenditures and other operating activities.
On September 20, 2012, the drilling of the Sara-1 well commenced. The Sara-1 well was located approximately 60 kilometers off the coast of Israel in approximately 1,400 meters of water. On October 22, 2012 we announced that the Sara-1 well was drilled vertically to a final total depth of 3,928 meters TVDSS. We encountered approximately 98 meters of high quality reservoir sands in the lower Miocene/upper Oligocene which had good porosity and permeability. Wireline logs confirmed residual gas saturation in the reservoir suggesting hydrocarbon migration through the system. However, the sands were wet with no commercial quantities of hydrocarbons present. On October 26, 2012 we released the Noble Homer Ferrington.